Costco Wholesale Case Study
Costco Wholesale is the seventh largest retailer in the world and in 2006, its total sales reached close to $59 billion dollars, which came from its 496 warehouse locations operating in the United States, Canada, Puerto Rico, Taiwan, Japan, Korea, Mexico, and the United Kingdom (p. 216). This was mainly due to the business and merchandising savvy of Jim Sinegal, the CEO and cofounder of Costco.
Costco’s mission: “To continually provide our members with quality goods and services at the lowest possible price” directly reflects upon its business model to produce high sales volumes and swift inventory turnover through the use of low prices on a wide range of select merchandise (p. 217). Costco manages to operate with high profitability within lower gross margins due to its high volume purchasing, efficient distribution, and reduced handling of merchandise in no-frills, self-service warehouse facilities (p. 217). Costco, like …show more content…
The five main principles are: (1) obey the law, (2) take care of the members, (3) take care of the employees; which Sinegal emphasizes that Costco’s employees are its most important asset, (4) respect the supplies, and finally (5) reward the shareholders (p. 228). Costco’s employees, in relation to the competitors’ employees, were paid higher wages and had more substantial benefits package, which is why employee turnover at Costco is under 6% after a full year of employment (p. 226).
By following these business values and adhering to its overall mission, Costco has been able to differentiate itself from other large-scale retailers and maintain increasingly profitable returns while also providing rewarding job opportunities for its employees and high quality products and an overall exceptional shopping experience for its
Costco’s mission: “To continually provide our members with quality goods and services at the lowest possible price” directly reflects upon its business model to produce high sales volumes and swift inventory turnover through the use of low prices on a wide range of select merchandise (p. 217). Costco manages to operate with high profitability within lower gross margins due to its high volume purchasing, efficient distribution, and reduced handling of merchandise in no-frills, self-service warehouse facilities (p. 217). Costco, like …show more content…
The five main principles are: (1) obey the law, (2) take care of the members, (3) take care of the employees; which Sinegal emphasizes that Costco’s employees are its most important asset, (4) respect the supplies, and finally (5) reward the shareholders (p. 228). Costco’s employees, in relation to the competitors’ employees, were paid higher wages and had more substantial benefits package, which is why employee turnover at Costco is under 6% after a full year of employment (p. 226).
By following these business values and adhering to its overall mission, Costco has been able to differentiate itself from other large-scale retailers and maintain increasingly profitable returns while also providing rewarding job opportunities for its employees and high quality products and an overall exceptional shopping experience for its